Impact of Covid-19 and UK Government Recovery Plan on TUI Group: A STEEPLE Analysis
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Added on  2023/06/07
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This article discusses the impact of Covid-19 pandemic and UK Government recovery plan on TUI Group through a STEEPLE analysis. It covers the internal, macro and micro environment of TUI Group and its operations. The article also highlights the benefits of online platform, CSR activities and expansion of business for TUI Group.
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TABLE OF CONTENTS INTRODUCTION..........................................................................................................................3 MAIN BODY...................................................................................................................................3 Business Overview.......................................................................................................................3 Impacts of covid-19 pandemic on internal environment of TUI group.......................................4 Impact of UK Government recovery plan on TUI group............................................................5 Impact of covid 19 pandemic on micro environment of TUI group............................................5 Impact of UK Government recovery plan on micro environment...............................................6 Impact of STEEPLE factors on TUI group's operations..............................................................6 CONCLUSION................................................................................................................................8 REFERENCES................................................................................................................................9
INTRODUCTION Business environment refers to sum of internal and external factors of business which can impact operations of business. The external factors of business are beyond the control of organization and has significant impact on functioning and growth of business. Internal business environment includes culture, events, members and factors within organization which can impact the decision- making process of business. External environment which is also known as macro environment includes factors which are outside the organization and it is beyond control of organizationandmayimpactbusinessoperations.Externalenvironmentdetermines opportunities and threats which may influence choices of business makers. Micro environment operating environment as functioning of it has direct impact on business. The aim of project is to enable understanding of internal, macro and micro environment of business. Project is about TUI group and impact of pandemic on its operations. Impacts of recovery plan of UK Government on internal and micro environment of company is being highlighted. It also includes impact of STEEPLE factors on TUI group along with suggestions of improvement through analysis of micro, macro and internal environment. Project also highlights recommendations on benefits of UK Government tourism recovery plan on TUI groups. MAIN BODY Business Overview TUI Group is German leisure engaged in hospitality and tourism industry. It is world's leading tourism industry which covers entire tourism chain under one roof. The reason behind its leading in tourism industry is its corporate culture which is its global responsibility. The aim of TUI group is to create unforgettable moments for customers and to make their dreams come true. They collaborate with countries and in committed and sustainable manner TUI group help to shape their futures (Buijtendijk, van Heiningen and Duineveld, 2021). The integrated model of TUI groups enable it to attract large customer volume and also has distribution power of source market. It gives differentiate products and services to its customers which has created entry
barrier for other companies in industry. The group comprises more than 400 hotels, luxury ships and cruises and airlines. It is a leading tourism business combining digital platform with local service delivery. Company has revenue of more than 2000 million Euro for the year March 2022. Company has more than 10000 employees in UK and Ireland and more than 50000 employees work in worldwide. The Company provides unique holiday packages along with portfolio of hotels and ships which enables it to provide excellent holiday experience to its customers and competitive advantages. Company has around 20% of market shares in UK market offering package holidays (Background of company, 2022). TUI group provide products such as charter and scheduled passenger airlines, cruise lines, package holidays, hotels and resort. Company provides travel agency services to its customers which make it easier for them to plan their holidays. The effective and efficient employees of company enables it to attract customers and increase market shares. Employees of TUI group enjoys flexibility while keeping higher performance and efficiency. The merger of TUI AG and TUI travel PLC has enabled company to increase its performance and progress faster. Company has created a simple organizational structure with a focus on integrated tourism business with clear responsibilities and accountability of every member across group. The new organizational structure with full integration of tour operations, hotels and cruise operations has created flatter hierarchy and allows company to effectively and efficiently operate in market (Khanna and et.al., 2020). Different operations of company such as tour, hotel and cruise operations have come under one organization which has resulted into numerous changes in roles and responsibilities. The sales and marketing of company is divided in three regions: Northern, central and western regions. The top competitors of TUI group are HIS, Norwegian Cruise Line Holdings and Invited home. Impacts of covid-19 pandemic on internal environment of TUI group Due to emergence of covid 19, Government put travel restriction which has resulted into downfall in operations of TUI group. Numerous of flights and holiday packages were cancelled leading to loss in business. This has impacted internal environment of TUI group. The greatest crisis faced by company during pandemic was cut of numerous jobs worldwide. Company had to create a safe working environment for its employees to enable them to feel safe. TUI group had reduced working hours of employees and pandemic had enabled employees to identify their
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other skills. Many employees had medical knowledge which has made them qualified to support hospitals and medical institutions (Nazli, 2022). IT team were engaged in to identify workloads which can be used to minimize operating costs of company. Pandemic had also impacted customers of TUI group as they were not able to return home. TUI group had to ensure that its customers who were on tour during pandemic could safely reach their homes. Company had provided better and accurate information to its customers and ensured that system required to ensure safe return of customers were in top shape. Company had to cancel many holiday packages and provide discounts to customers to ensure rebooking of package after pandemic. Impact of UK Government recovery plan on TUI group There was a great impact of pandemic on employees, customers, etc. of company. The travel restriction has prohibited the customers of company to return their homes. There was a cut off in jobs worldwide due to loss in operations. UK's government had launched recovery plan to enable companies to mitigate their losses due to pandemic. Government had launched many job retention schemes which were beneficial for employees as they were not sent off from their jobs. TUI group had to retain their employees and pay them salary due to this scheme. The government had aimed to reopen tourism business safely and profitably (Zhang and et.al., 2021). It has introduced many guidelines for safe operations of business and to promote tourism in UK. The guidelines have enabled company to start its operations and to mitigate the losses which were incurred during pandemic period. Company had provided discounts to its customers to rebook their holiday package. Government followed safety to make tourist feel safe to travel across UK. Government had also instructed financial institutions to waive off or to reduce interest rates during pandemic. UK Government has provided loans and subsidies to businesses for opening new company in tourism sector which has increased competition for TUI group. Impact of covid 19 pandemic on micro environment of TUI group Tourism is a labour-intensive sector and pandemic had a very big impact on labour and employment. Customer retention and loyalty is very essential for success of company. TUI group had to ensure long-lasting relationship with its customer, employees and suppliers for future success. Pandemic had impacted the relationship of company as it had to sent off many employees from company due to losses in operations and to reduce cost. Company had to
digitalize its operations which may affect staff commitments and future performance and service quality of employees. Restriction of movement of people from one place to another had impacted business of TUI group (Filimonau, Derqui and Matute, 2020). To maintain strong relationship with customersTUI had launched a system which provided itscustomers with accurate information about their queries. Company had to ensure that refunds were given to customers who had booked for package during pandemic. This was a time-consuming process which had an impact on future bookings. Pandemic has also impacted relationship of TUI group with its suppliers. To provide effective services to its customers it had contracts with hotels. The non- payments for services provided by suppliers to TUI group had affected the relationship. Impact of UK Government recovery plan on micro environment The reopening of tourism activities by Government had benefited companies operating in tourism sectors. TUI was able to accept bookings from customers for holiday packages and discounts which were provided by it has enabled it to retain its customers. The safety and security measures taken by government had made it easier for company to start its operations. The change in preferences of tourists had opened opportunities in places where tourism was not there (Hepburn and et.al., 2020). This has enabled company to expand its business at those places. Due to pandemic company was able to turn into online business which has given it more scope of expansion. Government has provided loans and subsidies which has helped TUI to invest in new projects and to expand business. Mitigation of losses and increase in opportunities had increased demand for employees and enabled company to develop strong relationship with employees. The CSR activities of company during pandemic has build brand image of company and increased customer base. Impact of STEEPLE factors on TUI group's operations The STEEPLE analysis tool is used to evaluate the macro environment of business this includes socio-cultural factors, technological factors, economic factors, environmental factors, political factors. Legal factors and ethical factors. Political factors Political factors have big impact on TUI group as it may impact the profitability of company. Company is abided to comply with all rules and regulations imposed by Government
of every country in which it is operating (Aburumman, 2020). The change in taxation policies or any other political rules and regulations impacts the operation and profit of company.TUI group has to keep close observations on political changes by maintaining relationship with local and national government. Economic factors Employmentpoliciesofcountryandunemploymentratealsoimpactsbusiness operations. It is a good thing for TUI group as it provides job opportunities to locals with choices of workforce and certain positions. The changes in interest rate influences profit margin of company as TUI takes loans for certain new projects. TUI operates worldwide, increase in inflation rate may impact its operational cost and demand. Socio-cultural factors Social factors includes age distribution, income levels, education, population growth, etc. It is very essential for company to manage employees as conflicts among them may impact productivity of company (STEEPLE analysis, 2022). Tourism sector has to deal with various customers with diverse preferences and tastes. Company has to look after each customer's preferences and tastes to ensure customer satisfaction and retention. Technological factors Advancement in technology has enabled company to turn its business online by taking online bookings from its customers. Technology and online business had cut off cost and increased profit margin of company. Technology has made it easier for company to communicate with its customers and suppliers. Environmental factors TUI has invested in new plans with more efficiency this has enabled company to operate as an environmental friendly company (Chuang and Huang, 2018). Fluctuation in fuel price is a major environmental factor which may have positive impact on operations of company. Decrease in fuel price will decrease cost of travelling and increase demand for tourism and hospitality. Legal factors Legal factors refer to laws and policies imposed by government in countries to protect rights of individuals. Company has airline services where there are laws related to air traffic, safety and security. Company has to comply with all laws related to airlines and to offer high
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quality services. TUI is operating in various countries and has to comply with laws which are imposed by government of different countries. Ethical factors There are many business ethics that are to be followed by organization for smooth functioning of business. Company has to engage itself in CSR activities to build positive image among customers and to increase its revenue. CONCLUSION TUI group can expand its business through online platform by taking bookings from customers online. This will increase pre booking for holiday packages and company will be able to effectively and efficiently operate. The website of company can provide all information about the products and services of company and also enable to resolve timely queries of customers. Company will be able to build strong relationship with its customers by providing high quality services. CSR activities by company can help it to operate as environmental friendly and build a positive image among its customers. The Government recovery plan has enabled company to expand its business and to mitigate losses due to pandemic. Government is focusing on expansion of tourism sector as it has large contribution to economy and GDP of country. Government is providing loans and subsidies which can help company to expand its hospitality and tourism business. The project had highlighted the impacts of covid 19 on internal and micro environment of TUI group along with impact of recovery plans by government. The STEEPEL analysis had enabled to understand the external factors that may impact operations of TUI group.
REFERENCES Books and Journals Aburumman, A. H., 2020. The concept of global governance in tourism franchises: a case study of TUI group.Entrepreneurship and Sustainability Issues. 8(2). p.1321. Buijtendijk, H., van Heiningen, J. and Duineveld, M., 2021. The productive role of innovation in a large tourism organisation (TUI).Tourism Management. 85. p.104312. Chuang, S. P. and Huang, S. J., 2018. The effect of environmental corporate social responsibility on environmental performance and business competitiveness: The mediation of green information technology capital.Journal of business ethics. 150(4). pp.991-1009. Filimonau, V., Derqui, B. and Matute, J., 2020. The COVID-19 pandemic and organisational commitmentofseniorhotelmanagers.InternationalJournalofHospitality Management. 91. p.102659. Hepburn, C. and et.al., 2020. Will COVID-19 fiscal recovery packages accelerate or retard progress on climate change?.Oxford Review of Economic Policy. 36(Supplement_1). pp.S359-S381. Khanna, A. and et.al., 2020, November. Blockchain technology for hospitality industry. In European, Mediterranean, and Middle Eastern Conference on Information Systems(pp. 99-112). Springer, Cham. Nazli, M., 2022. Tourist guides facing the impacts of the pandemic COVID-19.Current Issues in Tourism. 25(12). pp.1866-1870. Zhang, H. and et.al., 2021. Forecasting tourism recovery amid COVID-19.Annals of Tourism Research. 87. p.103149. Online Backgroundofcompany,2022.[Online].Availablethrough: <https://www.globaldata.com/company-profile/tui-ag/> STEEPLEanalysis,2022.[Online].Availablethrough: <https://www.ukessays.com/essays/tourism/an-analysis-of-the-tui-group-tourism- essay.php>